US trade panel launches probe against India

The US International Trade Commission (USITC) has started hearing on the impact of India's trade policies on US businesses, amidst fresh challenges to India's national solar energy mission and its policies related to intellectual property rights in the manufacture and sale of medicines.

The USITC, which started investigations at the instance of powerful legislators and business groups, is expected to hear about two dozen representatives of various business and advocacy groups.

The USITC kicked off the ''fact-finding'' investigation on 'Trade, Investment, and Industrial Policies in India: Effects on the US Economy,' on Wednesday, upon authorisation by the Senate Finance Committee and the House of Representatives' Ways and Means Committee.

US business bodies, including the powerful pharmaceutical industry and groups representing solar panel makers have slammed India for its trade practices, alleging they hit US jobs and business.

The patent controversies centre around India's decisions to deny patents to certain cancer drugs such as Novartis' Glivec and Bayer's Nexavar, even as it granted compulsory licenses to domestic producers of generic versions of these drugs.

Washington has also of late become more aggressive in its drug regulations, with the US FDA disqualifying some major Indian pharma companies that manufacture generic drugs from exporting to the US over alleged quality issues.

While the US pharmaceutical industry is worried over India's alleged negation of intellectual property rights, solar panel makers in the US are complaining that India's policy of domestic content requirements discriminate against US manufacturers.

India, on the other hand, has asked Washington to justify its own incentives offered to US companies that use local labour and products in renewable energy and water projects.

The US insists on use of local products and labour by businesses to avoid punitive action be the state.

Meanwhile, the Obama administration has filed a case at the World Trade Organisation over India's rules connected with the Jawaharlal Nehru National Solar Mission.

Washington had, last year, also moved the WTO against India's solar energy programme, when it formally requested consultations over the policies, a case which Japan and Australia have since joined.

US officials now say the second phase of the solar energy programme has only done more harm to US businesses as the local content rules also cover thin-film technology that comprises the majority of US solar product exports to India.

"These domestic content requirements discriminate against US exports by requiring solar power developers to use Indian-manufactured equipment instead of US equipment," trade representative Michael Froman said.

Although India is a major trade partner of the US, business groups and lawmakers in Washington see India as a serial trade offender as its policies fail to cater exclusively to the interests of US companies.

Meanwhile, relations between the two countries have seen an erosion after the recent arrest and strip-search of a lady Indian diplomat in New York in over alleged visa fraud charges.

The arrest sparked fury in India, prompted retaliatory measures against US diplomats and plunged US-India relations to their lowest point.